Percival Hussey v Paul Wright
| Jurisdiction | Jamaica |
| Judge | Daye, J |
| Judgment Date | 27 May 2016 |
| Neutral Citation | [2016] JMSC Civ 86 |
| Docket Number | IN CIVIL DIVISION CLAIM NO. 2010 HCV 00852 |
| Court | Supreme Court (Jamaica) |
| Date | 27 May 2016 |
[2016] JMSC Civ 86
IN THE SUPREME COURT OF JUDICATURE OF JAMAICA
IN CIVIL DIVISION CLAIM NO. 2010 HCV 00852
Douglas Thompson for Applicant
Roderick Gordon instructed by Gordon McGrath for Claimant/Respondent
CIVIL PROCEDURE - Default judgment - Application to set aside default judgment - 2nd application - Civil Procedure Rules 2002, Rule 13(1)(2)(3) as amended - Definition - Promissory Note - Bills of Eschange Act, s. 83 - Stamp Duty Act, sections 35-36, 50 - Enforceability of instrument - Creation of Hire Purchase Agreement
A Final Judgment was entered on 5 th January 2012 against the Defendant/Applicant at the request of the Claimant/Respondent on the 17 th May, 2010. It was for the sum of US$124,428.16 inclusive of interest at the rate of 3 percent up to the date of judgment and costs in the amount of J$26,136.44.
This was a default judgment pursuant to CPR. 10.3 ( 1) of the Civil Procedure Rules 2002, as amended in 2006. The Defendant, though he had acknowledged service of the claim form by the Claimant, failed to file his defence within forty-two (42) days of the service of the claim form and particulars of claim dated February 24, 2010.
The Defendant did file a defence on the 21 st July 2010. However, this defence was filed out of time.
The Defendant/Applicant acknowledged receipt of this final judgment on the 25 th January, 2012. Consequently, he filed on the 16 th February, 2012 an application to set aside the final judgment. He exhibited then a copy of his proposed defence to an affidavit sworn by his attorney on record.
On 29 th October, 2012 Pusey, J. sitting in Chambers heard and dismissed this Application to set aside the default judgment. It appears the reason for this decision was that the Applicant failed to provide details and particulars in his supporting affidavit of the dates of the claim form, the date of service and such other relevant pleadings as the date of entry of default judgment.
As a result, the Applicant filed a re-issue notice of application to set aside the default judgment on the 2 nd November, 2012. This application was a second application to set aside default judgment. It was supported by an affidavit which sought to correct the details which were absent in the first application. The same defence was exhibited to the affidavit and the grounds of the defence were the same.
I accept the submission of the Defendant/Applicant which was not opposed by the Claimant/Respondent that a Judge of the Supreme Court, sitting in Chambers has an inherent jurisdiction to set aside or vary an order, where leave is given exparte , when new matters are brought to his attention either with respect to the facts or the law. I accept that the inherent jurisdiction does permit a Judge in Chambers to hear a second or subsequent application to set aside a default judgment. (per, Rowe P. Gordon and Ors. v Vickers and Ors. (1990) 27 JLR 60, per Carey JA, Vehicles and Supplies Ltd. V the Minister of Foreign Affairs, Trade and Industry SCCA 10/89 and per Sinclair-Haynes J. Beckford v Quest Security Services Ltd., CL 2002 B 176 ).
The only difference between the Applicant's first and second application to set aside the default judgment was the corrections of the pleadings or particulars that were omitted. Since the Applicant's defence was on file from July 2010, in the Court, and he was not able to present it at his first application, the Court permitted his second application.
Rule 13 (1) – (3) empowers the Court as follows:
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(1) The Court may set aside or vary a judgment entered under Part 12, if the Defendant has a real prospect of successfully defending the claim
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(2) In considering whether to set aside or vary a judgment under this rule, the Court must consider whether the defendant has
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(a) applied to the Court as soon as is necessarily practicable after finding out that judgment has been entered,
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(b) given a good explanation for the failure to file an acknowledgment of service or a defence as the case may be.
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(3) Rule 13.4 provides for who can apply to set aside a default judgment:
‘any person directly affected by the judgment (13.4 (1))
It also provides how the application should be made. It must be supported –‘by evidence on an affidavit (R.13.4 (2). It must (ii) exhibit a draft of the proposed defence (R 13.4 (3).
The Defendant/Applicant has satisfied the requirement that:
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(i) he is a party affected by the default judgment as it is directly entered against him
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(ii) he filed an Affidavit dated 2 nd November, 2012 supporting his application, (iii) he exhibited a draft defence to his Affidavit dated 21 st July, 2010.
In his Affidavit at paragraphs 1 to 6, he gave evidence that:
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(1) he applied as soon as was reasonably practicable to set aside the default judgment after finding out if it had been entered.
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(2) he has a good explanation for failure to file his defence on time, viz., he was trying to locate documents and records to instruct his Attorney but these documents were misplaced.
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(3) his affidavit exhibited his defence that he has a real prospect of success.
The order and sequence of the paragraphs at the Defendant/Applicant's affidavit reflect the grounds set out in R. 13.3 (1) to ( 2) of the CPR 2002 before it was amended in September 2006. In fact Counsel for the Claimant in his submissions and authorities of July 29, 2003 quoted the pre-amended Rule 13.3 (2).
The difference between the order of sequence of the pre-2006 amended Rule 13.3 and the post 2002 CPR Rule 13.3 is material as the first ground that a judge must consider to exercise his discretion i.e. set aside a Defendant's judgment is whether the Applicant has a real prospect of succeeding in defending the claim. This warrants an explanation of the of the Applicant's affidavit in support of his exhibited defence.
Both in his affidavit (paragraphs 8, 9 and 10) his defence exhibited (paragraphs 3, 4, 5) attack the validity of the three promissory notes on which the default judgment was made. He also contended that the transaction giving rise to the three promissory notes on which the default judgment was made. He also contended that the three promissory notes was a higher purchase agreement
His reasons for contending that he had a good prospect of success are two: viz the validity of the promissory note and that the correct remedy of the Claimant is possession under the alleged hire purchase agreement. They are summarized in paragraph 13 of his draft exhibited Defence as follows:
‘13 ………
(a) The defectiveness and/or validity or unenforceability of the promissory notes: and
(b) The absence of an interest rate upon the face of the promissory notes,
(c) The Claimant's failure to fulfil the conditions upon which the said promissory notes were executed to wit, the execution of hire purchase agreements in respect of the motor trucks purchased.
The test of real prospect of success was formulated by Lord Woolf M.R. in Swain v Hillman [2001] All ER 91 at 94 he expounded:
‘ the words 'no prospect of succeeding …. speak for speak for themselves. The word “real” distinguishes fanciful prospect of success. They direct the Court to the need to see whether there is a ‘realistic’ as opposed to a ‘fanciful’ prospect of success’.
P. Harrison J.A. gives some guidance how to apply this test in Gordon Stewart v Andrew Reid and Bay Roc Ltd. and (Merrick (Herman) Samuels SCCA. No. 201 2005. Pages 6 – 7. He said:
‘ the prime test being’ no real prospect of success’ require that the learned judge do an assessment of the party's case to determine the probable ultimate success or failure. Hence, it must be a ‘real prospect’ and not a “fanciful” one ’.
He said further:
‘ The judge's focus is therefore in effect directed to the ultimate result of the action as distinct from the initial contention of each party’.
Now applying this direction, I consider the enforceability and/or validity of the three promissory notes. The essence of this contention is that the promissory notes are regulated and defined by the Bills of Exchange Act and the Stamp Duty Act. These three promissory notes were not stamped within seven (7) days of their execution as required by Sec. 35 of the Stamp Duty Act.
The Court of Appeal in Garth Dyche v Juliet Richardson and Michael Banbury [2014] JMCA CIV. 23 pronounced on the effect of non-compliance of stamping a promissory note within Sec 35–36 and 50 of the Stamp Duty Act 1937. Phillips J.A. delivered the unanimous judgment of the Court of Appeal that had to decide the connectedness of the preliminary ruling of the judge at first instance that the promissory note in question which was not stamped had no evidentiary effect and could not be relied upon.
The issues according to Phillips JA were whether the promissory note was stamped in breach of Section 35 of the Stamp Duty Act, 1937 and therefore not admissible by virtue of Section 36 of the Act and can the promissory note be relied on to correspond to the existence of a loan between the parties:
I pause to refer to the pleadings of the Claimant/Respondent about the three (3) promissory notes. He states in para. 2 of the Particulars of Claim:
‘The Claimant agree so to do [secure finance for the purchase of vehicle] and on three (3) occasions loaned the Defendant monies for the value of three trucks, the contracts for which were executed by way of three (3) promissory notes m three copies of which were attached as ‘PW I.’
Section 35 of the Stamp Duty Act of Jamaica, 1937, states as follows:
‘ The...
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